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NextEra Energy Agrees To Buy Energy Future Holdings' Stake In Oncor Electric Delivery Company

NextEra Energy, Inc. (NYSE: NEE) reached a definitive deal under which a newly formed subsidiary of NextEra Energy would buy acquire 100 percent of the equity of reorganized Energy Future Holdings Corp. and some of its direct, as well as, indirect subsidiaries. This included EFH's approximately 80 percent indirect stake in Oncor Electric Delivery Company implying an enterprise value of about $18.4 billion.

NextEra Energy said that the agreement would be filed as part of the restructuring of EFH, which is currently before the United States Bankruptcy Court for the District of Delaware. The deal is also part of a complete reorganization plan, which meant to enable EFH to emerge from Chapter 11 bankruptcy. The transaction requires the Bankruptcy Court approval to proceed further.

The company indicated it plans to fund $9.5 billion, mainly for the repayment of EFIH debt as part of the deal. The company expects to pay some creditors with cash and others in its common stock. The number of shares to be issued would be based on the estimated cash on hand at EFH at the closing of the transaction, the average price of the common stock for a specified number of days leading up to the closing and other factors specified in the deal.

NextEra Energy plans to use a combination of debt, convertible equity units, and proceeds from asset sales to fund cash being provided to creditors. The company clarified that the transaction does not involve any financing conditions and that it plans to repay EFIH first lien debtor-in-possession financing in full. Currently it is estimated about $5.4 billion principal amount.

Its chairman and CEO, Jim Robo, commented, "We are incredibly impressed by Oncor's management team and its employees, and we are committed to retaining the Oncor name, its Dallas headquarters and local management. NextEra Energy shares Oncor's strategy of making smart, long-term investments in transmission and distribution to continue to deliver affordable, reliable electric service to its customers. We look forward to working closely with Oncor's leadership team and filing our joint application with the Public Utility Commission of Texas.

The company committed to retaining the local management and that no voluntary workforce reduction for a minimum of two years after the transaction was consummated. The company expects the transaction to be meaningfully accretive to its energy earnings.

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